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Australia Inflation January 2024

Australia: Inflation stable in January

Inflation came in at December’s 3.4% in January, surprising markets on the downside and marking the joint-lowest reading since November 2021. Softer increases in prices for transport and health offset sharper increases in prices for food and household equipment and services.

Meanwhile, annual average inflation moderated to 5.2% in January from 5.5% in December.

Lastly, consumer prices rose 0.41% over the previous month in January, contrasting December’s 0.08% decrease.

Commenting on the release, ING’s Robert Carnell stated:

“Markets will have been encouraged to see this data supporting their view that the Reserve Bank of Australia has finished hiking rates and that the next move will be down. But while there is no disputing the weakness of the January price data, we still think that the road ahead could see inflation pushing higher again over the first half of this year, before it reverts back to a more obvious downtrend again. While this probably won’t be enough to prompt the RBA to hike again, it remains an outside possibility.”

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